Sunday, April 15, 2012

Patents - Necessary Evil

The deal with patents is fairly simple. Innovate, file patent, get exclusive rights for some period of time on your invention and make money from your invention. Now the problems.

Too many patents being filed

Too many generic patents

Patent Troll

Defensive patents

In simple terms the problem is uncertainty. I have developed this cool technology and I have no clue if someone already has a patent on it. File stupid patents, because if you don't someone else will and that is a threat. Oops someone sued me, how much do I need to pay to settle this apart from the lawyer fees. Patents add huge variance to predicting costs/profits in business.

The fix is simple enough - bring certainty and sanity to the patent ecosystem.

Time is money

The exclusive rights to use your invention is nothing but a way to make money. And the simplest way to fix this is to base exclusiveness on money and not on time. What this means is that at the time of filing patents, you need to put a monetary value on it which tells the worth of the patent. The cost of filing patent would be based on this monetary value (call it patent tax). This has two important repercussions.

Patent Troll is controlled because a finite value is attached to patent. Irrespective of how patents are "sold" to others for use, total payout cannot exceed the declared value of the patent.

Stupid patents are avoided because you need to attach monetary value which will be taxed. Unless you are sure that patent is worth that value, you probably don't want to waste money on it.

I guess what I am talking about is making patents a market where patents can be purchased/used to make life better on planet by figuring out a way to attach monetary value to patents instead of finding it out through expensive court battles. This makes the process efficient and reduces uncertainty and provide value to both the inventor and the user of the technology. The idea as I understood was always to reward the inventor and never to prevent others from using it. Preventing other from using it is just a way to reward the inventor, but not the only way. If we can find alternative ways for ensuring the same, we can perhaps bring some sanity to the system so that both the inventor and society as a whole can benefit from the invention at reasonable costs, predictably.